Firm working on Elon Musk's Hyperloop leases space in L.A.'s Arts District

The Hyperloop proposed by billionaire Elon Musk would work somewhat like a pneumatic delivery system, shooting passengers in capsules through a tube. (AP)

Hyperloop isn't all hype.

A company behind the futuristic, high-speed transportation system fantasized by Tesla and SpaceX billionaire Elon Musk has leased warehouse space in downtown Los Angeles and is rapidly adding new workers to a staff of 20 full-time employees.

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Musk's imaginary Hyperloop would use vacuum tubes to transport freight and passengers at speeds of 750 mph, racing from Los Angeles to San Francisco in half an hour. Until recently, it's been little more than an idea.

Now Hyperloop Technologies Inc., one company working on the project, has taken up residence for Hyperloop World Headquarters in a 6,500-square-foot industrial space in a gentrifying section of the Arts District.

Wedged into a corner abutting Interstate 10, the Los Angeles River and railroad tracks, Hyperloop shares a scruffy, graffiti-marked block with a fish wholesaler and a number of garment factories.

Tuesday morning, young men wearing jeans, T-shirts and baseball caps were arriving for work at the company's unmarked front door.

An owner of the property said Hyperloop has committed to leasing nearly 38,000 square feet in the current building and an adjacent property over the next 12 months.

The proximity of the renovated former industrial building with curving bow-truss ceilings to an Industrial Revolution-era transportation may be intentional.

"It has barn doors on the back that overlook an industrial yard [and] a very urban vibe," said landlord Jeff Weller of Lion Real Estate Group. "Being next to the train tracks is hopefully very symbolic for them."

The area does have amenities. The neighborhood boasts a Stumptown Coffee roastery, the Greenbar Craft Distillery liquor company, and, on the corner, an open-all-night strip club called the Playpen.

The surrounding blocks are home to foodie destinations Bestia and Factory Kitchen and the artsy bar Villains Tavern. The cutting-edge campus of Southern California Institute of Architecture is a short distance away.

Important for Musk, who in late 2013 spent almost $24 million to acquire a pair of estates in Bel-Air, the Arts District property is only two blocks from an onramp for the westbound Santa Monica Freeway.

A source close to the company, who was not authorized speak publicly, confirmed the company has moved into the space, which was chosen in part so Hyperloop could be around artists and designers and other creative types in a space big enough to build large-scale hardware.

The neighborhood has been a favorite of L.A.'s apparel industry for years, said real estate broker John Zanetos of CBRE Group Inc., who represented the landlord in the Hyperloop lease. Over the last two years a few tech firms have also arrived, and more are on the horizon.

"Tech, entertainment and design-related firms are looking at the Arts District as a viable location," he said.

First publicly theorized in 2013, Musk's Hyperloop idea has attracted some high-tech and high-finance wizards. Hyperloop Technologies is co-chaired by venture capitalist and Uber underwriter Shervin Pishevar and Musk's former PayPal COO David O. Sacks and includes on its board X Prize Foundation Chairman Peter Diamandis and President Obama's former campaign guru Jim Messina.

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Musk is not an officer of the company nor on the Hyperloop board.

The push to develop Hyperloop's practical technology is being led by former SpaceX engineer Brogan BamBrogan.

Funded by a reported $8.5 million in seed money, the company has raised an additional $20 million of the estimated $80 million it will need to build a five-mile Hyperloop test track, according to the source. Musk has said the track might be constructed in Texas.

The company's website has job postings for 29 positions, offering work for engineers, designers, technicians, an office manager and an "aerodynamicist."